Comparing 30-Year Mortgage Rates

Rates on 30-year mortgages dropped below the 7% threshold Wednesday, plunging to 6.84%. That's the flagship average's most affordable level in seven weeks. Most other mortgage categories also saw significant declines Wednesday.

Today's Mortgage Rate Averages: New Purchase

Rates on 30-year new purchase mortgages sank 16 basis points Wednesday, lowering the average to 6.84%. It's the first measure below 7% since early April and signals the cheapest level for 30-year rates since March 29. After surging to a 5-month peak of 7.37% in late April, 30-year mortgage rates have since ceded more than a half percentage point.

Rates on 30-year mortgages still remain elevated vs. early February, when the average dipped as low as 6.36%. But 30-year rates are now more than a percentage point below the historic 23-year peak of 8.01% we saw in October.

New purchase 15-year mortgage rates also fell significantly Wednesday, plunging 17 basis points. Now down to 6.01%, the 15-year average is also at its lowest level since late March. Additionally, today's 15-year rates are now more than a percentage point under last fall's 7.08% peak —the highest level registered since 2000.

Wednesday's jumbo 30-year rates fell 11 basis points, landing at a 7.02% average. That compares to a recent high of 7.30%. Though daily historical jumbo rates were not published before 2009, it's estimated the 8.14% peak attained last autumn was the most expensive jumbo 30-year average in 20-plus years.

Rate movement across most other new purchase loan classifications was also markedly down Wednesday, though rates on FHA loans held constant.

The Weekly Freddie Mac Average

Every Thursday afternoon, Freddie Mac publishes a weekly average of 30-year mortgage rates. Today's reading fell 7 basis points to 7.02%, signifying a second week of declines.1 Back in October, however, Freddie Mac's average reached a historic 23-year peak of 7.79%. It later declined considerably, registering a low point of 6.60% in mid-January.

Freddie Mac’s average differs from what we report for 30-year rates because Freddie Mac calculates a weekly average that combines five previous days of rates. In contrast, our Investopedia 30-year average is a daily reading, offering a more precise and timely indicator of rate movement. In addition, the criteria for included loans (e.g., quantity of down payment, credit score, incorporation of discount points) varies between Freddie Mac's methodology and our own.

Today's Mortgage Rate Averages: Refinancing

Refinancing rates exhibited a little less movement Wednesday than their new purchase counterparts. The 30-year refi average subtracted just 2 basis points, extending the spread between 30-year new purchase and refi rates to a wide 55 basis points. The 15-year and jumbo 30-year refi averages meanwhile declined 18 basis points. Several other refi averages were unchanged on Wednesday.

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What Causes Mortgage Rates to Rise or Fall?

Mortgage rates are determined by a complex interaction of macroeconomic and industry factors, such as:

• The level and direction of the bond market, specifically 10-year Treasury yields

• The Federal Reserve's current monetary policy, notably as it relates to bond purchasing and financing government-backed mortgages

• Competition between mortgage providers and across loan categories

Because fluctuations can be caused by any number of these at once, it's generally difficult to attribute the change to any one factor.

Macroeconomic factors maintained the mortgage market relatively low for much of 2021. In particular, the Federal Reserve had been purchasing billions of dollars of bonds in response to the pandemic's economic pressures. This bond-buying policy is a primary influencer of mortgage rates.

But commencing in November 2021, the Fed began tapering its bond purchases downward, making substantial reductions each month until reaching net zero in March 2022.2

Between that time and July 2023, the Fed aggressively raised the federal funds rate to fight decades-high inflation. While the fed funds rate can influence mortgage rates, it does not explicitly do so. In fact, the fed funds rate and mortgage rates can advance in opposite directions.

But given the historic pace and extent of the Fed's 2022 and 2023 rate increases—raising the benchmark rate 5.25 percentage points over 16 months—even the indirect influence of the fed funds rate has resulted in a dramatic upward impact on mortgage rates over the last two years.